Location: Waldo County, ME | Metro: Waldo County, ME
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,180 |
| 1 Bedroom | $1,190 |
| 2 Bedrooms | $1,420 |
| 3 Bedrooms | $1,830 |
| 4 Bedrooms | $2,060 |
| 5 Bedrooms | $2,390 |
| 6 Bedrooms | $2,677 |
| 7 Bedrooms | $2,891 |
| 8 Bedrooms | $3,036 |
U.S. Census Bureau data (2024)
A decision on whether to purchase a property in ZIP code 04922 for Section 8 investment hinges on three key factors: Fair Market Rent (FMR), market rent comparison, and rental demand. Let's break down each step:
1) Does FMR of $1,410 cover the debt service on a $253,036 property?
The FMR is the amount a landlord can charge for rent if the tenant is receiving Section 8 assistance. To determine if this covers debt service, you need to calculate the annual mortgage payment plus any other costs such as property taxes, insurance, and maintenance. For simplicity, let's assume a 30-year fixed-rate mortgage at an interest rate of 4.5%, which would result in a monthly principal and interest payment of approximately $1,275. Adding property tax (assuming 1.2% of the property value), insurance ($800 annually), and maintenance ($1,000 annually), the total annual cost would be around $17,700. Dividing this by 12 gives a monthly cost of about $1,475. At $1,410 per month, the FMR does not fully cover the debt service, resulting in a shortfall of $65 per month. Therefore, the answer is No.
2) Is the market rent of $1,308 above, at, or below the FMR?
The Census Bureau reports that the average market rent in ZIP 04922 is $1,308. This is below the FMR of $1,410. Since market rents are lower than what you could potentially charge under Section 8, the answer is Below. However, this doesn't directly impact the decision if the FMR doesn't cover debt service.
3) Are 12.2% of residents renters and with N/A-day days on market sufficient demand?
ZIP 04922 has a rental population of 12.2%. The days on market (DOM) being listed as N/A suggests there might be limited data available, indicating either a very low turnover or a lack of recent sales data. With only 12.2% of the population renting, demand is relatively low. This means that even if you were able to charge the FMR, the pool of potential tenants might be too small to ensure steady occupancy. Thus, the answer is No.
In conclusion, based on the provided data, purchasing a property in ZIP 04922 for Section 8 investment is not advisable. The FMR does not sufficiently cover the debt service, and the rental demand is low. Even though the market rent is below the FMR, this alone does not justify the investment given the other constraints.
Data Sources: FMR data from HUD (2027). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.